Environmental and Social Sustainability Report

Environmental and social sustainability mission statement

ACLEDA Bank is committed to achieving strong, sustainable financial returns, while respecting the environment and community within which we live. We subscribe to the concept of triple bottom line ('people, planet, profit') reporting and are developing indicators for measuring and reporting on our performance and impacts on the society and the environment and to implement a reporting structure based on the guidelines of the Global Reporting Initiative.

The key elements of ACLEDA Bank's Environmental and social sustainability mission are:

1. To provide a framework of guidelines within which ACLEDA Bank can operate in a sustainable manner so that our impact on the environment, society and the community in which we operate is managed in a responsible way.
2. To continue to introduce energy efficient systems into our buildings and to manage sensibly our energy requirements wherever we operate.
3. To honour the society in which we live and actively work to promote an inclusive culture embracing not just shareholders and staff, customers, and business partners but respect for the individual within our community.
4. To recognise that supporting the community is not just morally sound but good for business as well — our 'good health' and prosperity are mutually interdependent.

Environment

ACLEDA Bank fully subscribes to international conventions which prohibit the provision of credit to, or otherwise support, any activities which might harm the environment, be morally repugnant or jeopardise human rights. In particular the bank has in place policies which forbid involvement with exploitative forms of forced or child labour, trade in weapons and munitions, gambling, casinos, brothels, regulated wildlife or wildlife products and production or trade in radioactive materials or significant volumes of hazardous chemicals.

The Bank employs two full time Environmental Officers who regularly undertake training and refresher courses to coordinate ACLEDA's environmental activities and monitor performance.

Environmental Performance Indicators

In order to establish baselines for the measurement of our efforts to reduce our environmental impact, during 2005 we introduced a tracking system for resource usage. The results are given under their respective headings below and will be used to benchmark our future performance.

Paper Usage

In 2008, paper usage was cut by 0.52% and waste paper was cut by 11.11% per co-worker compared to 2007. This was mainly due to increased use of electronic data storage and the sending of information by e-mail and our internal intranet. Additionally all staff have been trained to use double side printing and to recycle single sided documents.

	2008	2007	2006	2005
Materials
Paper in kg/FTE	23.18	23.30	25.44	38.92
Waste
Waste paper in kg/FTE	2.32	2.61	2.32	3.18

Energy Consumption

Electricity consumption per co-worker increased by 27.33% in 2008 because of the increasing use of technology and the number of new offices connected to the grid (as opposed to relying on generator). Gasoline consumption per co-worker was cut by 17.10% compared to 2007 because the opening of new offices closer to our customers in the rural areas reduced the need for travel. However diesel usage rose by 38.80% as the bank is reducing the use of motorcycles in favour of diesel cars for the safety and security of its staff. Lubricant and gas consumption were also cut in 2008 by 7.84% and 35.56% compared in 2007.

	2008	2007	2006	2005
Energy
Electricity in kWh/FTE	943.92	741.34	510.44	535.83
Gasoline in l/FTE	64.92	78.31	96.36	111.56
Diesel in l/FTE	61.07	44.00	45.66	40.43
Lubricant in l/FTE	2.94	3.19	4.03	4.54
Gas in kg/FTE	0.29	0.45	0.53	0.78
Emission of CO2 (equivalents — in thousands of kg)
Electricity	2,768	1,605	793	688
Gasoline	824	734	648	621
Diesel	894	476	354	259

The CO₂ equivalents above refer to the Greenhouse Gas Protocol Calculation principles.

Water

Water consumption was cut by 4.33% in 2008 compared to 2007 because usage is monitored and water saving procedures are being implemented with storage and recycling of rain water, especially during the monsoon season, to reduce the off-take from the main which relies on river, reservoirs and bores. An underground water storage and treatment tank is provided for in the headquarters building feeding directly off the roof and car park.

	2008	2007	2006	2005
Water
Water in m3/FTE	22.98	24.02	26.62	30.29

Business Travel

In 2008, the total distance travelled by car rose by 7.43% whilst motorcycle use was reduced by 19.82%. The explanation for this is that i) the opening of more rural branches entails more travel between branches, and, ii) for safety and security reasons the bank is phasing down the use of motorcycles in favour of cars.

	2008	2007	2006	2005
Business Travel
By car in km/FTE	362.55	337.46	335.02	-
By motorcycle in km/FTE	2,789.73	3,479.21	4,336.23	-

Social Sustainability

ACLEDA Bank's corporate culture is built on respect for the society in which we operate and an inclusive perspective on our stakeholders embracing not just shareholders and staff, customers and business partners but the community at large. In addition to the environmental programs mentioned above the bank observes a policy of equality in all dealings with the public in general and customers and staff alike. Above all, ACLEDA Bank has practiced from the very beginning 'zero tolerance' of corruption both internally and externally and transgressions are dealt with summarily.

The following are key principles in ACLEDA's corporate social responsibility policy:

Staff

• ACLEDA is an 'equal opportunity' employer. Apart from those jobs which involve a higher physical risk (e.g. guards and messengers) appointment to all positions at every level is based entirely on merit regardless of gender or physical disability.
• ACLEDA Bank aims to be the most progressive employer in Cambodia providing medical, pension and other benefits such as personal and housing loan schemes and an employee share ownership program for all staff who have completed probation. It provides comprehensive training both for new recruits as well as experienced staff and encourages those who wish to further develop themselves through external programs.
• A high level committee under the chairmanship of the Chairman of the Board has been specifically tasked with the responsibility of setting and monitoring the bank's moral and ethical standards and respect for human rights
• In consultation with its staff the bank has drawn up social policies covering i) Code of Conduct, ii) Human Resources Management, iii) Health & Safety, iv) External Relations, v) Freedom of Association and the Right to Collective Bargaining. These are now published on Lotus Notes so that every member of the staff has free (and paperless) access to the most up-to-date versions.
• The staff are represented by a self elected Staff Representative Committee, which excludes management, and a Staff Sports Committee, to promote healthy recreation and good fellowship. At its headquarters, the bank provides a clinic under the care of a full time doctor and a full time nurse. Healthy safe working practices are part of the training provided to all employees under the doctor's supervision. A Health and Safety Policy under the direct responsibility of the Senior Vice President & Head of Human Resources Division is in place which includes a policy for the support of our staff and their families suffering from HIV/AIDS.

	2008	2007	2006	2005
Employment
Number of staff	6,128	4,401	3,028	2,484
Male	4,228	3,164	2,265	1,918
Female	1,900	1,237	763	566
Number of staff (FTE)	5,331	3,937	2,825	2,335
Training and Education
Training — career development and refresher programs	1,428	1,178	950	4,084
Training of new recruits — induction program	1,901	1,714	686	562
Provide training to external students — local	695	654	638	282
Provide training to external students — international	3	4	12	9

Community

ACLEDA recognises that playing our part as good citizens in the community in which we abide is vital to our mutual interests and prosperity. Major initiatives we are taking are:

• Developing and offering appropriate products and services carefully selected and developed for the particular needs of Cambodian society. In 2006 the bank launched a housing loan scheme, with interest rates fixed for up to 10 years to enable Cambodian people, especially in the lower wealth segment, to purchase their own homes.
• Expanding outreach: opening up banking services to new communities in new locations by expanding our network in the provinces and extending on-line banking services to mobilise savings. The expansion of our 24 hours a day/7 days a week ATM network to all provinces in 2008 has enabled our customers to access their funds at their own convenience irrespective of the normal opening hours of the bank or national holidays.
• During January 12 - February 20, 2009, we conducted our annual survey on our micro, small and medium loan customers' living standards to test the impact of our credit services. This involved 2,500 accounts randomly selected from our loan customers of whom 64.1% were micro loans, 27.4% were small loans and 8.5% from medium loan clients, as a proportion of our total loan customers. The responses indicated that across all sectors approximately 87.4% considered that their wealth had increased as a result of credit provided by ACLEDA Bank, 8.9% did not detect any noticeable change either way while 3.7% had the perception that they were worse off than before.

	2008	2007	2006	2005
Income Situation
Growth	87.4%	89.2%	93.3%	90.0%
Stability	8.9%	7.4%	6.2%	7.5% - 9.5%
Reduced	3.7%	3.4%	0.5%	1.1% - 2.3%

• Whilst these results show a disappointing decline from recent years, our analysis indicates that the economy is at least partly responsible with a sharp rise in inflation in 2008 and an estimated reduction of 3.1% in GDP growth. Nevertheless, it is a matter of real concern and further investigation will be undertaken in 2009 to obtain more specific information as to the underlying causes.
• During 2008, ACLEDA extended its outreach to the lower segment with an increase of 7,784 (5.5%) new Microbusiness loans over the previous year.

	2008	2007	2006	2005
Number of Microbusiness loans outstanding	146,545	138,861	126,289	-
Average Microbusiness loan size (US$)	389	494	400	-

• Incorporated into our policies are strictures against overselling or encouraging customers to over commit themselves or buy inappropriate products or services. As a matter of principle, ACLEDA does not impose mandatory savings requirements on its customers.
• Transparency and 'truth in advertising' are strictly enforced when developing promoting and selling our products and services and full and detailed information is provided through brochures, our website and other promotional material.
• ACLEDA practices equality in its lending irrespective of gender or race: 59% of our borrowing customers are female.
• Customer confidentiality is inculcated in all our staff during induction training and transgressions are treated as a serious offence.
• Recognising the particular problem of disability in Cambodia, ACLEDA is taking into account the special needs of the disabled when constructing new, or renovating old, offices.
• As a commercial organisation ACLEDA does not receive subsidies but may on occasion, and where appropriate, receive financial support to provide non-commercial services such as workshops for external trainees.
• ACLEDA does not ally itself to any particular political parties or creeds but seeks to cooperate and work in harmony with the elected government of the day. To this end the bank regularly participates in meetings with senior officials through industry associations, business forums, chambers of commerce and other group activities. Individual meetings with officials are conducted with transparency and important matters are minuted. ACLEDA has strict rules governing 'undue entertainment' or other activities which might be open to question on the grounds of probity, including the provision of banking services at non-commercial rates ('policy lending').
• To assist the development of microfinance ACLEDA provided 695 internships for local students and 3 for international students from Japan, India, and England.

Note: FTE (Full Time Equivalent): average number of full-time co-workers during the year.